U.S. consumer spending and prices rose moderately in June, pointing to slower ec...
WASHINGTON - U.S. consumer spending and prices rose moderately in June, pointing to slower economic growth and benign inflation that could see the Federal Reserve cutting interest rates on Wednesday for the first time in a decade.
The report from the Commerce Department on Tuesday was released as officials from the Fed were due to gather for a two-day policy meeting against the backdrop of an uncertain economic outlook. The 10-year old economic expansion, the longest in history, is facing headwinds from trade tensions, fears of a disorderly departure from the European Union by Britain and weak global growth.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, gained 0.3% as an increase in services and outlays on other goods offset a decline in purchases of motor vehicles. The data was included in last Friday’s second-quarter gross domestic product report, which showed consumer spending increased at a 4.3% annualized rate, accelerating from a tepid 1.1% pace in the January-March period.Robust consumer spending blunted some of the hit to GDP from weak exports, business investment and a slowdown in inventory accumulation. The economy grew at a 2.1% rate last quarter, pulling back from the first quarter’s brisk 3.1% pace.
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